PT Indocement Tunggal Prakarsa Tbk · IDX:INTP
PT Indocement Tunggal Prakarsa Tbk — Q1 2019 Earnings Presentation
33 slides from PT Indocement Tunggal Prakarsa Tbk's earnings presentation, May 15, 2019
Slide 1: Q1 2019 Financial Results
INDOCEMENT PT Indocement Tunggal Prakarsa Tbk Q1 2019 Financial Results
Slide 2: Agenda
Agenda INDOCEMENT Indocement Fact Sheet & Indocement Today Current Domestic Market Condition Financial Update Q1 2019 Investment Strategy Outlook 2019 Slide 2 - May 15, 2019 PT Indocement Tunggal Prakarsa Tbk – Q1 2019 Financial Results
Slide 3: Indocement: A Well Positioned Player
Indocement: A Well Positioned Player INDOCEMENT Favorable • Presence in strongly growing markets West and Central Java regional • Strong RMC position in Jakarta with pull-through on CEM exposure Innovative • Innovative ways to maintain competitive cash cost, while still ways to maintaining high prod
Slide 4: Strong Footprint in West Java as a Key Advantage
Strong Footprint in West Java as a Key Advantage INDOCEMENT Integrated CEM plant AGG plant Country capital ANDAMAN SEA (Jakarta) Asset base CEM terminal RMC plant 25.5 mt CEM capacity BRUNEI MALAYSIA 2.8 mt AGG capacity 44 RMC plants Palembang Pontianak Samarinda Tanjung Priok Tarjun Cement Cirebon
Slide 5: Brand is a very Important Marketing Tool in Indonesia
Brand is a very Important Marketing Tool in Indonesia INDOCEMENT Our premium Perception Award brand • “Tiga Roda” brand is perceived to have best quality & service in the country. • “Top Brand” for eleven years. • In 2018, we won in three categories: cement, white cement and mortar. BUILDING MATERIA
Slide 6: Agenda
Agenda INDOCEMENT Indocement Fact Sheet & Indocement Today Current Domestic Market Condition Financial Update Q1 2019 Investment Strategy Outlook 2019 Slide 6 - May 15, 2019 PT Indocement Tunggal Prakarsa Tbk – Q1 2019 Financial Results
Slide 7: Indonesia – Favorable Macroeconomic Environment
Indonesia – Favorable Macroeconomic Environment INDOCEMENT Strong population Key: growing middle Upward trend in growth class urbanization +32 million +107 million 62.8% 53.3% 264 296 222 +9.5% 115 2017 2030 2017 2030 2015 2030 One of the fastest By 2050 almost 75% of growing countries Middle class
Slide 8: Long-term Potential of Indonesia is Clearly Visible
Long-term Potential of Indonesia is Clearly Visible INDOCEMENT Cement consumption per capita in kg Essroc adds 1.7mt 1,648 1,000 Average 763 excluding 617 China: 458 399 462 262 248 244 163 China South Malaysia Vietnam Thailand Australia Indonesia Phillippines India Pakistan Korea Source: government
Slide 9: Continuous Contribution to Strategic Infrastructure Projects
Continuous Contribution to Strategic Infrastructure Projects INDOCEMENT Infra. & Commercial Legend Jepara Tanjung Jati (PP) PP: Power Plant Batang (PP) PO: Port Patimban (PO) TR: Toll Road Jakarta – Cikampek Elevated (TR) OT: Office Tower Serang – Panimbang (TR) AP: Apartment Depok – Antasari (TR) T
Slide 10: Indonesia Cement Industry 2019 Landscape
Indonesia Cement Industry 2019 Landscape INDOCEMENT Sumatera: 17.7 Kalimantan: 5.8 Sulawesi: 14.1 Indonesia: 114.8 SI: 10.4 (I) SI: 7.4 (I) INTP: 2.8 (I) Integrated: 102.2 SBI: 1.8 (I) BSM: 4.4 (I) CCI: 3.0 (I) Grinding Mill: 12.6 SMBR: 3.9 (I) CCI: 2.3 (I) BSM: 1.2 (GM) MP:
Slide 11: Indonesia Cement Industry 2019 Capacity Share
Indonesia Cement Industry 2019 Capacity Share INDOCEMENT Capacity in million Tons per Annum (Capacity Share) 1. Semen Indonesia + SBI: 51.7 (45.1%) 75.9 94.3 108.0 111.5 114.8 (SBI: ex. LHI) 2. Indocement: 25.5 (22.2%) 5 16 21 22 6 25 3. Conch: 11.2 (9.7%) 10 12 12 12 4. Bosowa: 7.4 (6.4%) 5. Cemind
Slide 12: Indonesia – Volume Growth Amidst Oversupply Market
Indonesia – Volume Growth Amidst Oversupply Market INDOCEMENT Oversupply of 43 mtpa in 2019 100 91 85 % % 85 8 4 82% 17 % % 5 76 76 74% 7 6 % 80 71 % % % 67 % 68% 64 6 3 % 6 2 % 61% 6 4 % % 58% % 118 12 55% 57% 113 114 60 5 99 104 % 10 0 81 73 40 75 69 60 79 % 54 56 73 52 69 47 47 47 47 46 45 45 45
Slide 13: Regional Shift of Demand
Regional Shift of Demand: INDOCEMENT Better Growth Outlook in Central Java and Sumatera Market shares based on cement domestic sales (Q1 2018, Q1 2019) Indonesia: 59% , -0.4% Data in Box: Utilization Rate and Growth Rates YoY per area for FY 2018 Kalimantan: 15.7Mt 15.7Mt 80% , +4.0% Sulawesi: 41% ,
Slide 14: Solid footing to capitalize on demand recovery in key markets
Solid footing to capitalize on demand recovery in key markets INDOCEMENT Near bottom: <10% vol. growth rate from lowest point in ‟14 – „3M19 Recovery: 10% - 30% vol. growth rate from lowest point in ‟14 – „3M19 Strong Recovery: >30% vol. growth rate from lowest point in ‟14 – „3M19 Regions Year-to-D
Slide 15: Rainy season and General Election dampened Q1 domestic demand
Rainy season, combined with General Election INDOCEMENT dampened demand in cement domestic market for Q1 Q1 Q2 Q3 Q4 Indonesia monthly sales volume (kt) 2018 2019 7,188 6,777 6,419 6,533 6,471 5,622 6,101 5,149 5,696 4,884 5,658 5,205 5,337 4,821 3,334 +31% 30,052 39,489 Jan Feb Mar Apr May Jun Jul
Slide 16: Agenda
Agenda INDOCEMENT Indocement Fact Sheet & Indocement Today Current Domestic Market Condition Financial Update Q1 2019 Investment Strategy Outlook 2019 Slide 16 - May 15, 2019 PT Indocement Tunggal Prakarsa Tbk – Q1 2019 Financial Results
Slide 17: More bulk sales focus as Jakarta & West Java Projects started
More bulk sales focus of Indocement - as Jakarta & INDOCEMENT West Java Projects started Bag/Bulk sales composition 20,000 Bag Bulk In thousand tons 18,000 3,517 3,931 +12% 16,000 +5% -6% +9% 4,658 +11% 4,109 4,203 14,000 3,860 12,000 10,000 +1% -11% -3% +3% +4% 8,000 14,459 14,568 12,943 12,518 12,
Slide 18: Challenging Years, but The Worst is Left Behind
Challenging Years, but The Worst is Left Behind INDOCEMENT Stable pricing and not declining in Q1 unlike previous quarters Jun „18 – Mar ‟19 increase of +12.9% Source: average of Tiga Roda selling price surveyed across retailers in Java Our dual-brand strategy has successfully stopped a falling tren
Slide 19: Consolidated Statement of Comprehensive Income
Consolidated Statement of Comprehensive Income INDOCEMENT EBITDA margin expansion from 16.3% to 18.9% attributed to: higher ASP by +8% higher volume by +2% fuel and power cost per ton decrease by -5.6% distribution cost per ton was flat 1 as more sales to ex-Java (+3.5%) and declining sales
Slide 20: Strategic cost allocation to capitalize on growth market
Strategic cost allocation to capitalize on growth market INDOCEMENT Composition of Manufacturing Cost Operating Expenses 3M17 3M18 3M19 Selling Expense G&A Expense In Bio Trend 631 46.8% 595 524 +14% +6% 21.8% 48.0% 21.2% 163 158 10.1% 141 22.3% 19.4% 22.8% 11.3% 10.2% 45.4% 20.5% +16% -3% Raw Mater
Slide 21: Continue in Cost Leadership to Maintain a Decent Margin
Continue in Cost Leadership to Maintain a Decent Margin INDOCEMENT Pricing discipline and stronger demand point to sustained recovery period Strategic effort to capitalize on future growth while still managing fixed cost INTP Gross Margin Development INTP EBITDA Margin Development 43.2% 40.3% 41.4%
Slide 22: Quarterly Result
Quarterly Result INDOCEMENT Q2 „18 Q3 „18 Q4 „18 Q1 „19 • Terminal in Palembang was • Higher volume by +9% • IDR appreciation • Higher blended ASP as a commissioned • Higher blended ASP achieved • Declining coal price continuation from Q3 2018, due to second tier players having • Terminal in Lampung
Slide 23: Strategies under Tight Competition: Vertical Integration in RMC & Aggregates
Indocement’s Strategies under Current Tight Competition: INDOCEMENT Vertical Integration in Ready-Mix Concrete & Aggregates Focused Ready-Mix Concrete business particularly high-grade quality in order to meet the increase demand of infrastructure development in Indonesia. RMC Sales Volume AGG Sales
Slide 24: Balance Sheet
Balance Sheet INDOCEMENT Mar. 31, 2019 Dec. 31, 2018 Variance Description IDR Bio IDR Bio IDR Bio % Current Assets 12,337.0 12,315.8 21.2 0.2% Non-Current Assets 15,206.5 15,472.8 -266.2 -1.7% Current Liabilities 3,289.8 3,925.6 -635.8 -16.2% Non-Current Liabilities 635.4 641.3 -5.9 -0.9% Net Equity
Slide 25: Agenda
Agenda INDOCEMENT Indocement Fact Sheet & Indocement Today Current Domestic Market Condition Financial Update Q1 2019 Investment Strategy Outlook 2019 Slide 25 - May 15, 2019 PT Indocement Tunggal Prakarsa Tbk – Q1 2019 Financial Results
Slide 26: Vision 2020 – To be the prominent cement producer in Indonesia
Vision 2020 – To be the prominent cement producer in Indonesia INDOCEMENT Highest operating margin in the industry Turn around in selling price Cost leadership Highest customer satisfaction & increase market share “Sales is a Science” program to increase our sales and create customer value
Slide 27: Clear drivers of future growth
Clear drivers of future growth INDOCEMENT Strong volume momentum and outlook Unique market position of Growth Improving supply – demand Indocement drivers dynamics Pricing stabilized and improving Slide 27 - May 15, 2019 PT Indocement Tunggal Prakarsa Tbk – Q1 2019 Financial Results
Slide 28: Potential market consolidation as an additional upside
Potential market consolidation as an additional upside INDOCEMENT Newcomers operate Top tier consolidation in Q1; at cash losses others still possible Unfavorable cost structure due lower Newcomers actively look for capacity and inferior equipment buyers for their assets Interest to be paid on debt-
Slide 29: Controlling Dust Emission
Controlling Dust Emission INDOCEMENT Replace Kiln Electrostatic Precipitators (EP) to Bag House to reduce dust emission Target of dust emission by installing bag house <10 mg/Nm³ (Government regulation <65-75 mg/Nm³) Total capex spending 2017 – 2019 for Bag House: IDR 280.2 bio Filter Bag In
Slide 30: Cost Efficiency Measure
Cost Efficiency Measure INDOCEMENT Increasing Usage of Alternative Fuel Sources 2015 2016 2017 2018 Q1 2018 Q1 2019 2030 Signed agreement with Governor of West Coal 96.3% 95.5% 95.8% 93.5% 94.8% 92.5% 70.0% Java on Sept. 4, 2018 to purchase 500 ton Natural Gas 0.5% 0.2% 0.4% 0.2% 0.5% 0.1% Fuel Oi
Slide 31: Agenda
Agenda INDOCEMENT Indocement at Glance Current Domestic Market Condition Financial Update Q1 2019 Investment Strategy Outlook 2019 Slide 31 - May 15, 2019 PT Indocement Tunggal Prakarsa Tbk – Q1 2019 Financial Results
Slide 32: Outlook of Indonesian Cement Market
Outlook of Indonesian Cement Market INDOCEMENT National cement consumption growth started to turn positive and grew by 5% in 2018 (versus 7.6% in 2017) and expected to grow by 6-8% in 2nd half and 3-4% in Full Year of 2019 Consumption in 2019 will be driven by infrastructure projects plus commercial
Slide 33: Thank You
INDOCEMENT THANK YOU Better shelter for better life… Slide 33 - May 15, 2019 PT Indocement Tunggal Prakarsa Tbk – Q1 2019 Financial Results Indocement’s Palimanan Factory
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